Ukraine war drives European demand for bigger, cheaper missile arsenals

European militaries are turning to more affordable missile and interceptor systems in response to the Ukraine and Middle East conflicts, as high-end weapon inventories quickly dwindle in modern warfare. Experts warn that countries may not possess enough missiles to meet demands, as highlighted by Russian drone and missile attacks on Ukraine.

The European defense sector previously prioritized small-scale production of advanced weapons, leaving governments scrambling for lower-cost, high-volume systems. Startups are developing cost-effective alternatives designed to meet large-scale combat needs. The Netherlands recently purchased 700 Ruta Block 2 cruise missiles from European startup Destinus for Ukraine, while Britain awarded initial Skyhammer interceptor contracts to Cambridge Aerospace.

Ukraine has effectively countered Russian drone threats using a mix of machine guns, interceptor drones, and electronic warfare. Industry leaders aim to reduce the cost of interceptor systems from tens of millions of dollars to around $1-$2 million per successful interception. These emerging low-cost systems are seen as complementary to high-end air-defense platforms, with investors pouring funds into startups to scale production.

However, the main challenge lies in industrial capacity, as companies race to build the manufacturing capacity needed to sustain modern conflicts.